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Council of New York Cooperatives & Condominiums
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Tax Issues

Published: Summer 1996

GREAT STRIDES TAKEN TOWARDS
REASONABLE REAL ESTATE TAXES

The following report from the Action Committee on Reasonable Real Estate Taxes appeared in the Summer 1996 issue of the CNYC Newsletter.

Class 2 properties (multiple dwellings) in New York City pay a disproportionately large share of the real taxes. The Council of New York Cooperatives and the Action Committee for Reasonable Real Estate Taxes continue a six-year crusade for fair and predictable taxes.

Mayor Giuliani and City Council Speaker Vallone both support legislation that will begin to correct the inequity by reducing property taxes for homeowners in cooperatives and condominiums. The approach is to structure the relief in the form of a tax abatement to resident homeowners, which will be phased in over a period of nine years. While this phase-in is being implemented, the Real Property Tax Law will be amended to permit New York City cooperatives and condominiums to be taxed as Class 1 property in the 10th year.

CHANGE REQUIRES ACTION

This change in tax policy requires legislative action at the state level. Senator Roy Goodman has introduced S-6628, which provides for distribution of the $17 million already in the city's budget for fiscal 1996, and additional reductions of $70 million for fiscal 1997 and $120 million for fiscal 1998. It further requires that a long-term plan for tax reform be in place by the end of 1996.

Albany will enact a change that affects only New York City, if it knows that the city stands strongly behind the measure. This is typically done through a legislative recommendation from the City Council called a "Home Rule Message", along with a strong message of support from the Mayor. Once enacted by the state legislature, the bill will have to be signed into law by the Governor.

At that point, the city Department of Finance will circulate forms to all cooperatives and condominiums requesting information about the resident owners in the building, so that it can calculate the applicable refunds. Condominium unit owners will see the credit reflected on their own tax bills when the city implements the reduction. In cooperatives, where the credit will reduce the property tax bill for the entire building, the responsibility will fall to boards of directors to see that the credit is redistributed appropriately to resident shareholders.

ASK CITY AND STATE LEGISLATORS FOR THEIR SUPPORT

Never was there a more important time for New York cooperatives and condominiums to make their voices heard by the Mayor, the City Council, the state legislature and the Governor. Contact your City Council representative and ask that they actively support a Home Rule Message on tax reduction for cooperatives and condominiums.

Particularly if you live in boroughs other than Manhattan, it is vital that you remind your representatives that thousands of their constituents in cooperatives and condominiums need tax reform for fairness and predictability. Let them know that under the present system, homeowners in cooperatives and condominiums pay three to five times the taxes paid by owners of one-, two- and three-family homes. The proposed legislation begins to correct this unfairness. Ask their support for this legislation and for overall property tax reform with fair treatment of all taxpayers.

 
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